NEW YORK: The Dow crossed the 40,000 level for the first time on Thursday, notching a fresh all-time high and leading Wall Street gains a day after tepid inflation data bolstered hopes of interest-rate cuts.
The blue-chip index has recovered nearly 40% from its October 2022 lows, powered by strong quarterly results and rising bets of interest rate cuts by the Federal Reserve.
“The Dow is seen as ‘Main Street America’ and media across this country and global media reference the Dow,” said Quincy Crosby, chief global strategist at LPL Financial.
“What (the 40,000 milestone) means is that regardless of the concerns about inflation and consumer sentiment, the companies in the Dow, which represent a cross-section of our economy, continue to march higher on better earnings and stronger guidance.”
All three major indexes notched record closes in the previous session after a smaller-than-expected rise in consumer inflation fueled optimism that inflation was easing after three months of hotter numbers.
On the economic front, data showed the number of Americans filing new claims for jobless benefits fell 10,000 to a seasonally adjusted 222,000 for the week ended May 11.
Inflation is still not where the Fed needs it to be, with companies in the service sector continuing to feel they have pricing power, Richmond Federal Reserve president Thomas Barkin said.
Among earnings updates, Walmart rose 5.8% after the retail giant raised its fiscal 2025 sales and profit forecast, betting on easing inflation to further boost demand for essentials.
That helped consumer staples lead sectoral advances with a 1.6% gain.
Deere fell 3.2% after the farm equipment maker trimmed its annual profit forecast for the second time.
At 11:28 a.m. ET, the Dow Jones Industrial Average was up 112.55 points, or 0.28%, at 40,020.55, the S&P 500 was up 13.11 points, or 0.25%, at 5,321.26, and the Nasdaq Composite was up 35.67 points, or 0.21%, at 16,778.06.
The S&P index recorded 53 new 52-week highs and one new low, while the Nasdaq recorded 65 new highs and 34 new lows.